SET eyes long-term savings to boost Thailand's stock market

The Stock Exchange of Thailand (SET) is introducing the Thailand ISA to boost long-term savings and revive investor confidence. Inspired by Japan’s NISA, the initiative includes tax incentives and key market reforms to strengthen Thailand’s stock market.

The Stock Exchange of Thailand (SET) will soon consult the Finance Ministry regarding a project aimed at encouraging long-term savings and investment in the stock market. This initiative is part of an effort to strengthen the SET index and restore investor confidence, according to its president.

Kitipong Urapeepatanapong, President of the SET Board of Governors, stated that the proposed Thailand Individual Savings Account (ISA) would be modelled after Japan’s Nippon Individual Savings Account (NISA). It is one of several measures the SET plans to implement to halt the index decline and rejuvenate investor sentiment.Key Measures to Revitalise the Thai Stock Market

To boost market confidence, the SET has outlined several measures, including:

1. Thailand ISA Project

Kitipong revealed that the SET is currently consulting with the Securities and Exchange Commission (SEC) and will soon discuss the proposal with the Finance Ministry. The Thailand ISA is expected to provide tax exemptions for investors who hold shares for a specified period.

Under the scheme, investors in the SET would be exempted from income tax up to a certain limit. Additionally, capital gains from selling shares would also be tax-free, incentivising long-term investment. Japan’s NISA, which has a ceiling of 6 million yen, serves as the model, and the SET has nearly completed its feasibility study.

Once launched, the scheme would allow Thai citizens to invest directly in the stock market without relying on retirement mutual funds (RMFs) or long-term equity funds (LTFs).2. Omnibus Legal Reform

The SET plans to draft a decree to restore confidence in the stock market. This legal reform would consolidate multiple laws, including the SET Act, the Public Law, the Civil Code, and the Board of Investment Act, into a single framework for rapid implementation.

3. Jump+ Programme for Market Growth

The Jump+ programme aims to support listed firms in expanding their businesses and increasing their share value. The project will be funded by the Capital Market Development Fund.

4. Treasury Stock Buyback

To stabilise the market, the SET will lift restrictions on share buybacks for financially capable companies. Kitipong estimated that around 15 listed firms meet the criteria for share repurchase each year.

5. Encouraging S-Curve Economy Firms

The SET is in discussions with the Board of Investment (BOI) to facilitate the listing of businesses in emerging S-curve industries, further diversifying investment opportunities in the market.

6. Dual-Class Share Structure

To attract family-run businesses to the stock market, the SET plans to introduce a dual-class share system. This would allow companies to issue shares with voting rights separately from those designated solely for dividend returns, making listing more appealing to large corporations.

SET Index Faces Market Challenges

The SET index has dropped by 14.15% since 30 December last year, reaching 1,202.03 points as of 7 March. The proposed measures aim to stabilise the market, attract new investments, and create long-term growth for the Thai stock exchange.

With these strategic initiatives, the SET is striving to revitalise investor confidence and position Thailand’s stock market as a robust, long-term savings vehicle.

(2025/03/10-00:00)